March 14, 2006

Ukraine’s Yushchenko on offensive ahead of poll

KIEV (Reuters) - Ukraine's President Viktor Yushchenko said
on Tuesday opposition parties offered no credible alternative
as he attempted to claw back support before March 26 polls.

Yushchenko was brought to power on a wave of mass protests
in the 2004 "Orange Revolution," but is now viewed with
indifference by many voters disillusioned by splits in his
camp.

"The opposition has no program which can stand up in
intellectual terms with that of the government," Yushchenko
said during a two-hour news conference broadcast live on
television.

The pro-Russian Regions Party of Viktor Yanukovich,
defeated in the turbulent 2004 presidential race, leads in
opinion polls.

The Our Ukraine party, loyal to the president, lies a
distant second among more than 40 parties and pro-Western
Yushchenko acknowledged his allies would have to form a
coalition to stay in government.

Under new constitutional arrangements, the president will
have greatly reduced powers and the prime minister will be
chosen by the party or coalition with a majority in parliament.

Yushchenko, and his prime minister who heads the Our
Ukraine party list, have stressed Ukraine's improved ties with
the West along with improved public sector wages, pensions and
benefits.

ECONOMIC WOES

Ukraine has in the past year won coveted "market economy"
status from the European Union and the United States, overseen
a record privatization of a big steel mill and moved closer to
membership of the World Trade Organization.

But heady talk when Yushchenko came to power about moving
quickly toward EU membership has been quietly forgotten.

Economic growth has ground to a virtual standstill and
inflation is rising. Relations with Russia have soured and
prices for Russian natural gas have nearly doubled.

With Our Ukraine in second place -- and facing a challenge
from Yulia Tymoshenko, his former Orange Revolution ally turned
rival -- the president was prepared for post-election talks.

"It is in the interests of our country, our nation, to hold
negotiations that will lead to a consolidation of political
forces," Yushchenko said.

Yushchenko hoped groups that underpinned the Orange
Revolution could join forces. He said: "other forces that were
not participants can also take part."

But he declined comment for now on suggestions of a "grand
coalition" with Yanukovich, whom he fought so bitterly in 2004.

Opinion polls show no single party will be strong enough to
govern alone. The prospect of instability has made investors
uneasy and the central bank routinely intervenes to prop the
hryvnia currency.

Tymoshenko's dismissal as prime minister last September
after months of infighting between two government camps -- each
accusing the other of corruption -- left many supporters of the
revolution deeply disillusioned with liberal reformers.